Channel Sales FAQs 

Got a question about channel sales? We have answers.

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Developing channel partners depends on giving them value, providing enablement, and building relationships. The success of your partnership depends on finding ways to align organizational goals and to consistently create win-win situations. A channel partner reward program is an effective way to keep your channel on the same page as you. 

Any additional revenue that is generated by your channel partners through a sales channel is channel revenue. Here’s a simple example: If you are a manufacturer, any revenue that was generated by your distributor’s contractors would be channel revenue. 

Channel partners are the backbone of your channel. They get your products into the hands of the end-users. They’re intermediary businesses, such as distributors, contractors, dealers, vendors, wholesalers, consultants, value-added resellers, or referral partners. The exact role of what they do depends on their place in the distribution channel, but usually they help your business through sales (direct or indirect), marketing or logistics. 

Channel sales are indirect sales through your distribution channel. Channel partners – your intermediary agents and businesses – make those sales by selling your products to end-consumers or end-users. 

Direct sales are direct transactions between the brand and consumer. Channel sales rely on channel partners and other intermediary business to sell to the end-consumer. The former is easier to control, while the latter is harder to manage directly.  

Channel strategies are the plans you use to improve your channel sales. These can include building brand awareness, increasing sales, reducing “cost-to-serve,” providing training and enablement, or gathering more complete data to personalize your marketing to channel partners. 

Give your sales channel a little pick-me-up through a channel sales incentive program. Incentives can increase channel sales, improve channel marketing, inspire the loyalty of your channel partners, and ultimately boost your sales channel profits. 

Channel incentives motivate channel partners to prioritize your brand. They can be rewards, recognition, discount, sales incentive performance funds (SPIFFS) or rebates. These incentives inspire channel partners to recommend more of your products to end consumers, get more of your product in their product mix, provide more referrals, or include contact marketing data for your end-consumers. 

What are channel incentive program best practices? 

  • Define a specific, measurable goal for your channel incentive program. Objectives for channel incentive programs might be increasing revenue from your distributor sales reps or inspiring your dealers to include more complete data on warranty registration submissions. 
  • Select key performance indicators (KPIs) you can use to track progress towards your goal. Make sure these align with the desired behaviors you want to see from your channel partners. 
  • Identify your target audience. This is the group of channel partners whose behavior you want to change. 
  • Segment your audience, so that you can personalize your channel incentives and marketing, and more effectively analyze data. You can segment channel partners by region, territory, dealer, or their level of engagement with your brand. 
  • Empower yourself with the right incentive platforms and technology that can capture data, create necessary integrations with your CRM, and make your channel incentive program engaging. 
  • Match your rewards to your target audience. Make it personalized. Market your program, during onboarding and through the lifetime of your channel sales incentives. 
  • Track and analyze data. Try to spot trends you can capitalize on and problem areas to fix ASAP. 
  • If your channel incentive program is generating substantial ROI, consider increasing your budget or identify ways you can expand your program. 
  • Every few years, regroup and plan ways to refresh your channel partner incentive program. Usually, you’ll want to do this once the ROI from your channel partner incentive program begins to taper off. 

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